by Alexandre Bigot-Verdier, Lieza Dessein and Thomas Doennebrink
The past year has been an exciting one for the platform coop movement. In December 2016, Nathan Schneider launched the “Buy Twitter” campaign. Twitter was for sale and he suggested that its users buy it and to change its legal structure into a cooperative. This would allow the redistribution of the value created on the platform among its community of users. The idea got more attention than expected and the campaign was even presented at the Twitter stakeholders’ annual meeting in May 2017. In the end the campaign failed but it had managed to question very publicly who controls the tools we use daily. Why are we accepting that the value we create on platforms is extracted and distributed to private stakeholders? Would we be willing to invest in the technology of tomorrow to ensure more ethical surroundings? How would we govern the platforms if we were in charge? And how could we reconnect the digital economy to the local communities?
During the Ouishare Fest 2017 many speakers addressed those questions in their presentations. The city of Barcelona invests very proactively in new ways of connecting citizens, encouraging a bottom-up approach. A former Twitter employee is currently building a co-governed platform to facilitate the construction of resilient digital collaboration tools by social movements. And freelancers are developing networks and tools to create resilient ecosystems of entrepreneurs.
The platform co-op movement is only two years old. Slowly but surely the movement has grown and it is now looking into ways to get organized. Trebor Scholz and Nathan Schneider did a tremendous job inventorying existing coops and advocating their actions throughout the world. They are connecting people with one another in an effort to ease knowledge exchange. Through this movement, coops, academics, policy makers and people involved in social economics found a communication channel to spread their ideas. In all corners of the world the notion of platform cooperativism is being promoted and debated. Nevertheless, the community is aware that if it wants to compete with the Silicon Valley’s mastodons there is still a long way to go.
Every year, Platform Coops enthusiasts gather at the Ouishare Fest. This year they decided to set up a spontaneous workshop. Their objective was to gather the main learnings and challenges encountered by their community. The rest of this document will relate the exchanges that took place among the participants during and after this encounter.
How to fund the platform co-ops?
Building platform co-ops implies patience. The coop business model is a patient one, it is built for long term benefits. A coop is a company that is nurtured and this is the main difference with the short term vision of the startup world. Private stakeholders invest heavily in startups hoping to be betting on a “unicorn” and to have a quick return on investment. This creates a hyper competitive environment that makes it very difficult for holistic companies to emerge and compete. Investors quickly lose interest when business models are not build towards fast and high profits. To make platform coops emerge quicker there is a need for regulation and funding.
Local authorities start to question and to regulate the digital economy. They realize that it is in their best interest to keep a close eye on these companies because they have a direct influence on their communities. The challenge for them is to look into ways to reconnect the digital economy to their local communities. For communities to thrive, the digital economy needs to be inclusive and not extractive. City policymakers from all over the world are taking measures to avoid invasive platforms and encourage local initiatives.
The harder challenge to tackle is funding. Private foundations and investment funds are starting to partially fund ethical digital compagnies. For example, Nesta (UK) and the city of Barcelona or Brussels are investing in this field. CoopVentures (FR) is a 16M euros fund dedicated to fair digital initiatives. We also see the emergence of alternative models such as crowdfunding platforms. Opencollective (US) and Startnext (DE) are exploring new ways to propose crowdfunding solutions to their communities. But is this a viable strategy to compete with the classical start ups?
The attendees of the workshop wonder how to involve bigger coops. Do traditional coops have the money to fund fair platforms and would they be ready and willing to invest in those companies? How can we create the necessary incentives? Some of them seem to be ready. Maif (FR) is investing in the broad specter of the collaborative economy. The “Conseil québécois de la coopération et de la mutualité” launched a lab on the sharing economy in Montreal (CA). So it seems that there is an ability and willingness to fund initiatives. It would be interesting to verify which initiatives are funded and if they are part of the fair-side of the sharing economy.
Another question raised by attendees is whether we should invest in a series of initiatives or consolidate existing ones. The reason behind this question is that money in the platform coop movement is scarce. So wouldn’t it be more sustainable to invest in initiatives such as Stocksy (CAN) or Fairmondo (DE/UK)? Those platforms have shown traction, enjoy a certain visibility and have an active community. Wouldn’t it be wiser to invest in these companies to ensure sustainability and help them become known worldwide?
This proposal was counter argued by other attendees who value local impact more than worldwide deployment. Should all platforms seek global domination and is that the only way to be sustainable? Should coop models scale, and if they do, how can they keep in touch with their community? And how can smaller coops get real traction if nobody knows that they exist?
Maybe Loconomics (US) will manage to bring a solution to the issue of smaller coops. Loconomics is a cooperatively owned app on which you can find transportation, child care and other services that are all cooperatively owned.
SMart (EU) on the other hand managed to scale and implement their business model into 9 european countries, respecting existing legislation and adapting the model to the local communities. They provide services to freelancers with whom they share a company. The value created is redistributed through the development of services for the community.
All attendees agree that funding is an issue and that there is a real need to develop and raise awareness on the social benefits of the (platform) coop movement. If we manage to highlight the positive social impact of cooperative entrepreneurship we might find more traction amongst ethical financiers and policymakers to invest in this sector.
How to transfer knowledge and know-how?
Raising awareness about coops seems central if we want this movement to grow. The coop model is not well known. It’s a model that is not often studied in business schools where students are introduced to more liberal ways of entrepreneurship. This is even more true in the startup culture where business models are very capitalistic and dehumanized. It looks as if the digitalization of the economy is obliterating the human aspect of entrepreneurship. The quest towards efficiency seems endless and the main purpose is way too often monetary benefits for private external stakeholders. The immediate collateral damages are the impact on the working conditions of the platform workers and the disappearance of much needed local tax money.
The good news is that the digital economy is fairly new and people still remember the internet of the nineties. An internet that was fairer, where our data was not yet outsourced and exploited at our expense. Patronizing companies took over huge chunks of the digital landscape but today people start to get organized and look into ways to regain control.
Movements like “Occupy Wall Street” and “Nuit Debout” revealed the growing concerns about social and economic inequality. Appetite for change also emerges with what we like to label “the Y generation”. A growing part of the population is showing interest in social economics. Schools start designing masterclasses studying alternative business models. Academics and journalists such as Trebor Scholz, Naomi Klein and Nathan Schneider encounter considerable attention. Think-tanks gather knowledge around holistic organizations. Cities are surrounding themselves with specialists of the P2P movements to better understand the needs of their local communities. Governments are looking into ways to regulate the digital economy to prevent the disappearance of local tax money. And entrepreneurs are (re)discovering the coop model and its benefits. In return, the coop sector is surprised to find itself scrutinized.
There is a real opportunity detected by the attendees of the workshop between the old bigger coops and the new emerging ones. The “old” coops have an expertise in holistic entrepreneurship and developed a set of tools required to operate in democratic ways. They also invented sustainable business models that are serving their communities. The newer coops are eager to benefit from that experience. Attendees would also love to experiment with digitalization in the coop sector. Digitalization could ease processes and collaboration within the coop sector. Open sourcing appropriate technologies could ease scaling and reduce operational costs.
One of the seven principles of the coop sector is “Cooperation Among Cooperatives”. Everyone agreed on the fact that solidarity amongst structures is needed. This solidarity could take different forms: financial, service oriented, consuming products of other coops, P2P exchanges, …
This topic brought us back to the educational part. How can the new sector learn from the old one and vice versa? How can we make the coop model and its benefits better known amongst entrepreneurs? According to some attendees, the best way for coops to transfer knowledge is by being involved in incubators or even by creating their own. They could mentor entrepreneurs and give them insight in their operational knowledge. By doing so, they would gain an insight in the visions of the younger generation and could integrate these in their own companies. The young entrepreneurs would benefit tremendously of the expertise of the older coops. For the attendees of the workshop, this could be a first concrete goal to advocate for.
Does the juridical status really matter?
A major debate between the activists of the platform coop movement is the one concerning the juridical status of the coop. Is a coop the unique way to implement decentralized governance and a fair redistribution of created value?
One of the founders of Affinity.works (US) indicated that they are a for-profit company operating in the same way as a coop. They were strongly inspired by the coop model but chose not to be one because it would have made their funding opportunities a lot more complex. Some attendees think this is a risky bet, as the collective ownership and the distributed governance are not principles linked to that particular juridical status. Others argue that it is not the juridical status that is the unique token of responsible ethical entrepreneurship.
The founder of Open Collective (US) pointed out that some initiatives are not even looking for a juridical status. The complexity of administration often is a disincentive to community driven initiatives. Not every initiative is willing to constitute a juridical entity but they do need a legal structure to be able to raise funds and redistribute gains. The situation is even more complex for transnational or international communities.
SMart does not have solutions for volunteers, but it is tackling this problem for “regular“ workers. Indeed, not every freelancer wishes to set up his individual company so SMart is sharing theirs. Every member can use the company as their own. By doing so, they mutualise a part of their revenues which in return gives them access to services designed to ease their entrepreneurial activities.
Attendees seem to agree that, when possible, the coop model should be favored, but that it is important to remain open to hybrid and alternative solutions. There is a strong attachment to the distributed governance and the social impact of the companies. There was a consensus about the fact that we should be inclusive in an effort to learn from each other and by doing so to better our entrepreneurial endeavours continuously.
This document has been initiated by Alexandre Bigot-Verdier, Lieza Dessein and Thomas Doennebrink after the workshop held at the 2017 OuiShare Fest. This workshop was a spontaneous gathering of platform coops enthusiasts. The next Platform Cooperativism conferences in Toronto and then in New York will be occasions to challenge these orientations.